Assignment#5 - FI853 Debt, Money Instruments & Markets...

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Unformatted text preview: FI853 Debt, Money Instruments & Markets Assignment #5 (Nov. 28 th 2006) Cho, Gyu Ho FIN853: Fall 2006 Assignment #5 Chapter 10-21 F × [r(1+r)n]/[(1+r)n 1] To solve this problem, we can use a calculator: N 360 I/Y 0.6667( 8%/12) PV 150000 FV 0 CPT PMT Then, PMT=$1,100.6469/momth Chapter 11-15. Mont h Out. Bal. SMM Mort . Pay. Interes t Sch. Prin. Pre- Pay. Tot. Prin. Total CF 1 2 100,00 99,881 0.00027 5 0.00055 2 841 841 750 749.51 91 91.50 27.47 55.11 118.4 7 146.6 1 868.47 896.12 For calculation each cell, M1.CPR = 6% × 1/30 = 0.002 165 PSA = 1.65(0.002) = 0.0033 ⇒ M2.CPR = 6% × 2/30 = 0.004 ⇒ 165 PSA = 1.65(0.004) = 0.0066 M 1. SMM = 1 (1 CPR)1/12 = 1 (1 0.0033)1/12 = 0.000275 M 2.SMM = 1 (1 CPR)1/12 = 1 (1 0.0066)1/12 = 0.000552 M 1. Interest = 100,000 × 0.09/12 = 750 M 2. Interest = 99,934 × 0.09/12 = 749.51 M 1. Scheduled Principal = 841 100,000 × 0.09/12 = 91 M 2. Scheduled Principal = 841 99,934 × 0.09/12 = 91.50 M 1. Prepayment = 0.000275 × (100,000 M 1....
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This note was uploaded on 03/28/2008 for the course FIN 853 taught by Professor Longchen during the Fall '06 term at Michigan State University.

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Assignment#5 - FI853 Debt, Money Instruments & Markets...

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